Correlation Between Telenor ASA and Elisa Oyj

Can any of the company-specific risk be diversified away by investing in both Telenor ASA and Elisa Oyj at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Telenor ASA and Elisa Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Telenor ASA ADR and Elisa Oyj, you can compare the effects of market volatilities on Telenor ASA and Elisa Oyj and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Telenor ASA with a short position of Elisa Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telenor ASA and Elisa Oyj.

Diversification Opportunities for Telenor ASA and Elisa Oyj

0.56

Correlation Coefficient

Telenor ASA  Elisa Oyj

Very weak diversification

The 3 months correlation between Telenor and Elisa is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Telenor ASA ADR and Elisa Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elisa Oyj and Telenor ASA is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Telenor ASA ADR are associated (or correlated) with Elisa Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elisa Oyj has no effect on the direction of Telenor ASA i.e., Telenor ASA and Elisa Oyj go up and down completely randomly.

Pair Corralation between Telenor ASA and Elisa Oyj

Assuming the 90 days horizon Telenor ASA ADR is expected to under-perform the Elisa Oyj. But the pink sheet apears to be less risky and, when comparing its historical volatility, Telenor ASA ADR is 3.18 times less risky than Elisa Oyj. The pink sheet trades about -0.13 of its potential returns per unit of risk. The Elisa Oyj is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  2,591  in Elisa Oyj on October 6, 2025 and sell it today you would lose (286.00) from holding Elisa Oyj or give up 11.04% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Telenor ASA ADR  vs.  Elisa Oyj

Telenor ASA ADR

Risk-Adjusted Performance

Weakest

Over the last 90 days Telenor ASA ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Elisa Oyj

Risk-Adjusted Performance

Weakest

Over the last 90 days Elisa Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Elisa Oyj is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Telenor ASA and Elisa Oyj

The main advantage of trading using opposite Telenor ASA and Elisa Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telenor ASA position performs unexpectedly, Elisa Oyj can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Elisa Oyj will offset losses from the drop in Elisa Oyj's long position.

The idea behind Telenor ASA ADR and Elisa Oyj pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.